top

Bailout watchdog: TARP’s a flop

The watchdog charged with monitoring the government’s $700 billion bailout unleashed one of his harshest criticisms of the program to date, questioning its overall effectiveness.

Specifically, TARP has neither boosted bank lending nor decreased the number of foreclosures. Plus, it risks “re-inflating the bubble.” In other words, it’s been a failure.

Except for investment banks, that is, they’ve made windfall profits and paid themselves obscene bonuses. After being bailed out by the government with taxpayer money. They now can borrow money at virtually zero percent from the Fed then reinvest it in government securities for a guaranteed 3%+ return. Why should they lend money to you?

Geithner continues to demonstrate that his first and sole alliance is to investment banks, with little if any thought given to the public good.

Washington Note relates how someone suggested to Geithner that the highly qualified Elizabeth Warren be appointed to a Treasury Deputy Secretary position.

Elizabeth Warren is the Leo Gottlieb Professor of Law at Harvard Law School, Chair of the Congressional Oversight Panel created to investigate the U.S. banking bailout (TARP), and first developed the notion of a Consumer Financial Protection Agency.

Geithner’s alleged response: “Wall Street wouldn’t like it.”

No kidding!

For Geithner, that’s all that matters. Will the Street like it? After all, that’s where he’s from, and where he’s going back to. He’ll be amply rewarded for his efforts. Concerns for the American public do not enter into his calculations.